Return on Assets (ROA)measures a firm's
A)cost effectiveness of its operating activities.
B)profitable use of its assets.
C)profitability of sales.
D)return on shareholders' investment.

Question

Quizplus · Accepted Answer

Return on Assets (ROA) is a financial performance ratio that measures the profitability of a company's assets. It indicates how efficiently a company is using its assets to generate profits. A higher ROA indicates that a company is generating more profits with its assets, while a lower ROA indicates that a company is generating fewer profits with its assets. Therefore, option B is the correct choice. Option A, C, and D are incorrect because they do not directly measure a company's profitable use of its assets.

Return on Assets (ROA)measures a Firm's